PSP Investments, one of Canada’s largest pension investment managers, has reported a 12.6% one-year net return for its fiscal year ending March 31, 2025. According to PSP, its results were driven by strong performances across infrastructure, private equity, public market equities, and credit investments.
Over a five-year horizon, PSP achieved a 10.6% net annualized return, and over ten years an 8.2% annualized return, outperforming its Reference Portfolio by C$31.9 billion over the last decade. The Reference Portfolio is an investment benchmark set by Canada’s Treasury Board to match the government’s comfort level with pension risk. The portfolio is made up of about 59% global stocks and 41% bonds. PSP uses this as a target to beat over time without adding more risk. Unlike this simple mix, PSP also invests in private assets like real estate, infrastructure, and private equity to boost long-term returns through diversification and active management.
PSP’s private equity portfolio reported C$40.7 billion in net assets under management, comprising 13.6% of PSP’s total assets under management of C$300 billion. In fiscal 2025, the private equity portfolio delivered a 16.6% return and a five-year annualized return of 17.2%. Other PSP asset class strategies had the following performances: infrastructure 17.8%, credit investments 15.4%, and public market equities 15.1%. Real estate returns lagged, generating no return over one year and 4.9% over ten years.
PSP’s private equity strategy includes both fund and direct investments, with transaction sizes typically between C$100 million and C$250 million. Sectors of interest include financial, healthcare, technology, and communications. For example, earlier this month, PSP partnered with KKR to acquire a 20% equity stake in the transmission subsidiaries of American Electric Power, a utility company operating in Ohio, Indiana, and Michigan, in a transaction valued at approximately US$2.8 billion.
“PSP Investments demonstrated significant organizational capabilities in delivering strong returns and showing resilience in uncertain times,” said Deborah Orida, the president and CEO of PSP. “We are proud of the excess return we generated over the one year, five year and ten year periods. This demonstrates the strength and resiliency of our portfolio design and the benefits of investing with focus and foresight.”
PSP is headquartered in Ottawa and was formed in 1999 to manage the pension funds of the federal public service, the Canadian Forces, the Royal Canadian Mounted Police, and the Reserve Force.
© 2025 Private Equity Professional | June 18, 2025
